SPECULATION is growing that the Kwik-Fit tyres and exhausts group has put in a bid for the Auto Windscreens subsidiary of building materials group Heywood Williams.
A spokesman for the Huddersfield based company said that several bids had been expected for the car windscreen interests, which are no longer considered to be core activities, and several were received on Friday by merchant banker Deutsche Morgan Grenfell.
Auto Windscreens has about 25% of the windscreen replacement market and, like the industry leader, Auto Glass, which has 50%, is benefiting from tighter regulations as regards cracks and other weaknesses.
The benefits to Kwik-Fit are several in the event of it making the acquisition. They include access to another 150 or so sites throughout Britain to complement its existing 600, with the possibility of some rationalisation through merging on to the more efficient properties.
It would also give Kwik-Fit an additional marketing tool as it develops its plans to offer a customer service from the showroom to the scrap yard, one of chairman Sir Tom Farmer's aspirations for quite some time.
The Edinburgh-based company would appear the most natural buyer of Auto Windscreens, which Heywood is hoping will raise well in excess of #60m.
Sir Tom said recently that the UK depot network would be expanded to around 750 outlets. So at a stroke the timetable could be brought forward.
It would also help in the expansion into the Continent through the existing Dutch and Belgian chain and possibly later if Kwik-Fit decided to move into either Germany or Scandinavia.
Kwik-Fit has proved itself to be one of the most successful Scottish companies, and it has been highly innovative in its expansion into insurance.
Although no figures on market share have been divulged by the group, Kwik-Fit Insurance Services has performed above expectations to the extent that staffing levels have been expanded to almost 1300 people.
The insurance subsidiary utilises the information base which
is provided by the 14,000 or so customers using its car repair depots each day.
Auto Windscreens achieved operating profits of #5.8m last year, which compares with the Kwik-Fit total of #58.4m and pre-tax profits of #55.1m.
Heywood's move is to help it concentrate on PVC-U windows and doors in Britain and on manufactured housing and recreational vehicles such as caravans in America.
Last month, it paid #58m for the Spectus-Kestrel designer and extruder of window and door systems and cellular foam products.
It is planning to buy back 10% of its shares once the windscreen business is sold off.
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